Tradeweb Markets, the US fixed-income and derivatives trading venue, is set to go public this year, providing a windfall for its investment bank backers and fuelling what is expected to be a bumper year of market debuts in the US.
The New York group, majority-owned by data provider Refinitiv, is planning to list on Nasdaq, according to a filing with US regulators on Thursday. It is aiming for a market capitalisation of more than $5bn, according to a person familiar with the offering.
The move comes just five months after Refinitiv was split out of Thomson Reuters in a $17bn deal, and will provide an opportunity for some of its longtime investors to sell down their stakes. Among them are Citigroup, Credit Suisse, JPMorgan, Goldman Sachs, UBS and RBS.
This year could be one of the largest for US listings with some of Silicon Valley’s most hotly anticipated IPOs lining up their deals. Lyft, the ride-sharing service, on Friday unveiled its float, which is expected this month. Uber, the company’s rival, is planning to list later this year.
Founded in 1996, Tradeweb has been one of the winners from post-crisis rules such as the US Dodd-Frank act and Mifid II in Europe, which have incentivised more trading on transparent electronic markets.
It competes with Bloomberg and MarketAxess, with nearly $550bn a day of government and corporate debt, swaps and mortgages traded on its platform, which connects investment banks with their customers like asset managers, central banks and insurers.
Tradeweb will raise an as-yet undisclosed amount, which it will use to purchase the stakes of the shareholders. The 11 investment banks collectively own 46 per cent of the company, and contribute 42 per cent of its revenues.
It also disclosed that two senior executives — chief executive and co-founder Lee Olesky and president Billy Hult — were paid $22m and $15m respectively last year, mainly in stock and options awards.
Refinitiv, which owns a 55 per cent stake, will retain a controlling interest after listing, the filing said. Last year David Craig, Refinitiv chief executive, told the Financial Times that Tradeweb was “very strategic to us.”
Some shareholders have been keen to offload their stakes for several years but have been stymied by Tradeweb’s governance structure under Thomson Reuters. However, the sale of 55 per cent of Refinitiv to a consortium of Blackstone, the private equity group, the Canada Pension Plan Investment Board and GIC, the Singaporean wealth fund, for $17bn last year has changed the dynamics.
Many have also noted the performance of MarketAxess Holdings, a rival fixed-income trading venue. Its value has risen fourfold to nearly $8.8bn in the past five years.
Last month Tradeweb saw record trading volumes of US Treasuries, US investment grade credit and European exchange traded funds.
Before the IPO Tradeweb expects to make a special payment of $100m to the company’s original shareholders. Tradeweb made gross revenues of $684m in the year to December 31, up from $563m a year earlier. Net income rose 55 per cent to $130m.
JPMorgan is the lead banker and joint book-running managers are Citigroup, Goldman Sachs and Morgan Stanley.